Hello CMAA! In a past life, I was involved in corporate governance of NYSE and NASDAQ listed companies. I still get a steady stream of corporate governance focused emails and articles in my inbox regularly. One that recently stood out was the Director Institutes 2020-2021 survey. As we continue to exit the pandemic, governance is key for our clubs and I think the findings of this corporate governance report may help you reflect on your own club governance. Here are the key findings:
- More than 72 percent of public companies believe Boards and operations teams managed effectively through the pandemic and their organizations adapted to whatever was thrown at them. How do you think clubs would fare on this question if your Board were asked? From my perspective, clubs might exceed the 72 percent mark. We can stand tall with other businesses in the community for our crisis management abilities during the pandemic.
- Due to the pandemic, the focus on risk by Boards will increase. Twenty-six percent indicated a need to improve their crisis management planning as well. The last two decades has illustrated the principles of VUCA (volatile, uncertain, complex & ambiguous) with economic downturns, new government influence, extreme weather, cyber threats, and safety concerns. Many clubs likely need to take this same view and ensure the club can react quickly and effectively in crisis with the Board discussing what should be done to mitigate risk now.
- Virtual board and committee meetings are likely going to be incorporated into corporate governance going forward. They are a useful tool to enhance board engagement. But virtual meetings have their limits as noted in the next finding.
- Virtual board meetings worked during the pandemic, but few corporate directors view them as effective as in-person meetings due to the lack of community building, casual idea sharing, and strategic side conversations. I suspect clubs may consider incorporating a virtual component into their own governance structure going forward. If so, club managers should try to find other ways to compensate for some of the downsides of not having in-person meetings.
- Seventy percent of corporate board members indicated they spent more time in their corporate board role during the pandemic than in past years. Most report their time commitment increased by almost 50 percent this past year, but the time was manageable. I am not sure if this trend carried into club governance, but it is certainly something to be mindful of as we exit the pandemic. Did your club board members spend more time in their service role during the pandemic? Will service levels return to former practices after the pandemic? If not, will it impact the recruitment process for Board and committee members, as well as their board service satisfaction?
If you read the report, only 14 percent of corporate responses indicated they had included a global pandemic in their organizational planning. I suspect clubs would be much less than 14 percent and kudos to any club that had the forethought to ponder “what if there was a pandemic?” While I hope we will not see another global pandemic in our lifetime, it is just a matter of time before each of us has some type of minor or major club crisis. In a VUCA world, leadership and management requires you to be ready and nimble.
Have a great month and let us hope we all have some calm in our foreseeable future.
Jeff